Don’t automatically offer a refund

Don't automatically offer a refund
Written by: Karl Sakas

When a client’s unhappy—because your team made a big mistake—agencies often jump to offer free work or refunds. That’s a reasonable assumption, but it’s not necessarily the right strategy. Why? Because your client may not want a refund.

Instead, let your client vent, use lots of “I’d feel that way, too” and “I’m sorry this happened” acknowledgement, and then ask them a simple, open-ended question: “What can we do to make this right?”

I’m going to assume that the client’s right or at least mostly right—the approach is going to be somewhat different (i.e., fewer concessions) if the client is entirely in the wrong.

What Your Unhappy Clients Might Want Instead

If they’re really unhappy, here are some things they might want:

  • Give them a new contact at the agency.
  • Give them a refund, either full or pro-rated.
  • Offer them additional free “make good” work.
  • Re-do the work, ASAP.
  • Apologize to their boss.
  • Let them vent, with no further deliverables on your part.

Don’t automatically jump to a refund. One, it costs money. Two, it may not be what they want.

For instance, when the delivery person fails to deliver my Sunday New York Times, I don’t want an $8 refund or credit—I want a copy of the paper because I was looking forward to reading it. If they can [re-]deliver a paper within a couple hours, I don’t care about a credit on my account—I’m in the “re-do the work, ASAP” camp.

An Agency Example

I talked through this process recently with an agency owner who had an especially unhappy client.

His agency had done a PR project and it hadn’t gotten coverage. (The agency had warned this was a possibility… but perhaps they hadn’t warned hard enough.) The agency had offered the client a refund but the now-former client didn’t respond.

From their description, my sense was that their ex-client was more sad—about not getting results—rather than angry. Ignoring the client wasn’t an realistic option, because this was a client they’d see at networking events, so they didn’t want to burn bridges entirely.

We don’t know the final outcome yet, but the agency leader will ask their client what he’d like. From the earlier non-response, I suspect it’s going to be “let me vent” and nothing further.

The key is they’re going to ask what the client wants, instead of assuming. When you listen actively, you might be surprised at what you hear.

Applying This at Your Agency

Remember, everyone want to feel heard and understood—so your asking their ideal outcome is already helping, because you’re letting them express their needs.

Worst-case—assuming your contract limits your liability to what clients paid you—you owe a full refund. Best case, it might be something else that’s more satisfying to your client—that costs you less than a refund.

Question: What’s your process for handling unhappy clients when it escalates to this point?

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